Speaking of the same time of the year last season, DeFi reached its pinnacle. The Total Value Locked (TVL) skyrocketed from $1 billion in February to $12 billion in December. Some of the protocols generated 52,000% in returns. Allegiance to the concepts like liquidity mining, yield farming, crypto loans, lending, and borrowing that this year cloaked $96 billion in TVL. Protocols like AAVE emerged as a panacea to fix lending and borrowing problems like KYC, over-collateralization, and excessive interest in centralized finance.
In DeFi lending and borrowing, you can seek loans even if your collaterals are very small. That’s the beauty of this revolutionary technology and the reason why it is mustering loyalty in the FinTech and financial space. So, if you are looking for a quick loan and want to explore the best platforms, this is the right place. In this blog, you will get to know the top 3 platforms to pick for crypto loans.
Best Platforms of 2022 for Crypto Loans
#3 Oasis Borrow
In the Maker ecosystem, Oasis is a front runner to provide quick loans. It allows quick access to loans via token minting from the Maker vault. The best part is twin collateralised zones: 50% and 75% Loan To Value(LTV). Hence users have more choices to make while availing loans. The Oasis market is going very strong at $7.3 billion in locked assets. Whereas, there’s 2.7 billion in outstanding loans as well.
#2 Compound Finance
In the last DeFi summer, 4 names dominated the market: Compound, Synthetix, AAVE and MakerDAO. Compound proposed best use-cases of liquidity pools. On the compound protocol, users can lock tokens and earn interest. Borrowers can borrow funds at no fees with a very limited liquidation ratio. Thus safeguarding borrowers against the risk of liquidation. In the event of no loan payment, Compound liquidates only 50% stake. This is a big go-ahead to motivate borrowing tendencies on the compound finance protocol.
AAVE revolutionized the concept of loans like no other platform. For example, on Compound and Oasis protocol, there’s an option for collateralized loans. AAVE introduces completely non collateralized loans. All borrowers need to take flash loans in one transaction and pay it within that same. The upside is borrowers can swap those tokens on protocols with better rates.
In this way, they can walk away with a profit in no time. The only amount to pay is the transaction fee. Such use-cases bring a lot of individuals to the DeFi space. As a result, AAVE is the top shot of lending and borrowing.
AAVE also accepts 24 coins in comparison to other lending platforms. For example, Maker has 18, Compound 9, and Oasis 5.
With more than 2 billion unbanked population, the scope of financial inclusion narrows. Innovative technologies like DeFi have helped cater to this problem. The crypto space is further flooded with new concepts like NFTs and metaverse. These solutions could further drive adoption and fix pressing challenges existing from decades.